Name: Deltek Clarity: Where A&E Industry Insights Become Strategy
Uploaded: 2026-05-14T19:30:10.621Z
Duration: 1 h 56 s
Description: Deltek Clarity: Where A&E Industry Insights Become Strategy

Transcript for "Deltek Clarity: Where A&E Industry Insights Become Strategy": Hello, everyone. Thank you for joining today's webinar, Deltek Clarity, where A and E industry insights become strategy. Before we get started, just a few housekeeping items and reminders that many of you are probably already aware of, but just to make sure that we're all getting the best experience, make sure that you are using Google Chrome or Firefox. Some of these, you've probably you can just read through, but a couple of them I wanna call attention to. The slides for today are available in the resources. You can also get to some other great resources there, so make sure that you check that out. You can also resize your widgets in case you want to see the slides bigger or however you want to do that. And then you will also get a copy of this recording within twenty four hours so that you can dive in and go back to something that maybe I shared or information that you want to look at. Again, you'll be able to do that. Throughout the session today, I do encourage you to submit your questions. As you're thinking about it, go ahead and submit that question. We'll try to get to some of those questions at the end. But if not, I will make sure that those questions get addressed offline. We'll reach out to you and make sure that you have the information that you need. So let's dig into the results. I am excited to join you today to share the results of the forty seventh annual Deltek Clarity architecture and engineering industry study. Throughout the session today, I'm going to share some benchmarks and key insights from the report. You'll also hear about challenges that are facing the industry, how your firm can then leverage these results so that you can use this to set you up for success. Whether this is the first year that you have been diving into the Clarity data or you are a loyal Clarity follower, welcome, and thank you for taking the time to join today. My name is Megan Miller, and I am the director of the Deltek Clarity a and a Industry survey and the report and the analysis. I have I work with architecture and engineering companies around the world to help improve business processes through technology, through resources like Deltek Clarity to help identify where are the ways that you can help to improve your business, whether that's a process, whether that's a decision that you're making. And before I joined Deltek, I did work for a midsize architecture and engineering company for over a decade, and I continue to stay active in the industry today. If you know me, you know that I love clarity. I love benchmarks, and I am excited to dive into these results with you today and be able to share some of the insights. Keep in mind as we go through this, we are not able to get through all of the details that are in this report. It is chock full of so much great insight. So make sure that you are downloading the report, you dive into that, and then I'll share at the end of the session today how you can get even more information about each section of the report so that you can dive in even more throughout the next several months with us. If you aren't familiar with Clarity, let me level set just a little bit. The Deltek Clarity a and e industry study is the longest running and most comprehensive and report in the industry. We focus specifically on architecture and engineering in North America in this specific report. There are dozens of industry specific benchmarks and metrics and key performance indicators that are most important to this industry. This also serves as an opportunity to hear from others in the industry like you. What are the mark what what are the industry trends? What are we seeing in the market outlook? What are the biggest challenges that your business is facing? What are some of the initiatives that firms are looking forward to implementing over the next couple of years? This allows you to see how other firms are thinking, where you stack up, where are there opportunities for you to improve, and how can you take this information and really start to drive forward your business into what you want to be this year and in the future. This is the forty seventh year that we are delivering the a and e specific report. This has evolved over the years to be more comprehensive and to stay relevant for the issues that are necessary for your business and the things that are that you are facing each and every day. So we're constantly looking to evolve questions, add more options that are more timely and relevant, and be able to remove some things that maybe aren't as pertinent for this industry anymore. For those of you who've been following for a long time, this started as a financial report, and we've evolved this into being so much more than just that. This year, we actually had nearly 900 companies that participated in the survey. The results are based on 2025 fiscal data. So if you're looking to compare your results, make sure that you're comparing the right information, and so that you can be able to, look at your data in the right context. If your company participated in the survey, thank you, and please extend my heart heartfelt thank you to anyone on your team that helped fill this out. If you haven't participated, if you didn't participate or for those that participated, if you if you weren't able to do that, we can't deliver this without all of those participants. We can't give that great insight into, what's happening in your business. So if you weren't able to participate this year, that's okay. You can still get to all of the results, and we want you to consider participating next year. If you're curious about what it takes to participate, you want to see some of the questions maybe you haven't seen that before, drop us a message. Let us know. We can get you the questions from this year's survey so that you can start to work with your teams and think about how would you be able to participate in this in the future. This survey typically comes out at the beginning or middle sorry, January, and we close the survey in mid March. So just giving you context if you weren't able to participate, that's the timing that we're looking for. So what really is the purpose of Deltek Clarity? When you think about all of the benchmarks and insights into industry trends, you can take this information, and you have the opportunity to compare your business performance to others in the industry. So instead of just looking at what I've done in my company for the past five years, how do you know if that's really where you should be? Are you stretching your teams enough? Are you stretching them too much? What are we seeing in the rest of the industry? Firms of similar size, similar type, all of those different factors. And then you're able to identify what are we doing well, where are there areas for improvement for the business. This really should be a catalyst for conversation within your firm so that you can identify where are things working, where do we need to change so that we can better align with what's happening in other places in the industry. And it allows you to develop the strategies and, more importantly, the action plan to actually make change and drive your business forward. It's also a good opportunity to understand if there's places in your company that maybe they're misalignment. Maybe you have some key strategies and goals in one part of the business, but those are in direct conflict with what you're trying to achieve somewhere else. So by bringing your teams together, being able to better align, you can figure out where are those chances for better alignment or improvement, and what is the direct impact of what I need to do in my area with what's happening in other parts of the business. Really, so there aren't any surprises and that we're all moving together in the same direction. When we look at the Deltek Clarity Report, again, this year, we have five main areas of the report. We have key metrics, insights, benchmarks for business development, project management, human capital management, financial management, as well as technology trends. So let's take a look at the makeup of those companies, those nearly 900 companies, and who's included in that. This year, we had 38% of our participants were from architectural companies or predominantly architectural companies. Engineering or engineering dominant companies represented 54% of our participants. And then we also have 9% that don't neatly fit into either the a or the e bucket, but they're critically important to the industry. And so we had nearly 10% this year from that segment that participated as well. You can also see here the breakdown by size. So I would encourage you to make note of the different sizes that we capture here. So small being under 50, medium, that 51 to two fifty, and large firms above two fifty. The other thing that is important to note is that we had almost 5% of our, large firms were actually larger than 750 this year 750 employees. For the sake of analysis, those firms are included into the large segment for all of the information that you will see. So so that, you know, that that segment may not be quite large enough yet. We're hoping to get more of those companies to participate so we really can break out and do some additional analysis, for those those much larger firms. So make a note of these size ranges. You'll see how this fits into all of the data if you are not familiar with this, but look at where your company fits in the AE or other as well as the small, medium, and large. And then we also call out high performers for each year to monitor how they're doing things differently. And to be a high performer, you have to have a 15% or greater operating profit on net revenue as well as a three point zero or greater net labor multiplier. And so this year, you can see that we had 12% of our participants that answered the necessary questions to qualify for that and met the criteria for both. So, as you go through the results and you see in the report, you will see that all of those, the results will have a breakout of architecture compared to engineering, small, medium, and large, as well as our high performers and what we call all other firms. So those all other firms that you'll see is that 88% that didn't qualify as high performers. When we look at the clarity report each year, we try to extract some relevant themes. So what are we seeing across the board that's not necessarily one specific, area of the report or one specific segment, but what are we seeing across the board? And these are some of the key themes that came forward as we were doing the analysis this year. First and foremost, the financial performance seems to be normalizing. You'll see some of the data showing decreases in numbers. I think more of that is more around, normalization of some of that data, not necessarily significant declines after we've seen historic performance financially in the last few years. We're also seeing that there's quite a bit of pressure from being more efficient and having that pressure to be more efficient, to be more effective, to protect those margins. That pressure is increasing across the board. We're also seeing from a technology perspective that AI adoption is really accelerating, but the return on that or being able to measure the return on that is lagging. Firms are struggling to really see that return on investment and how it's benefiting their business. The other theme that's coming out is that firms are really focused on operational discipline, having data driven management decisions, being able to have that operational excellence and data driven decisions really becoming the standard practice. This isn't just what some firms are doing. This is really becoming the norm and the the minimum expectation rather than, you know, looking at, how do we just keep going through and doing things the way we've always done it. How do we do this better? How do we do this more efficiently? How do we operationalize and really use the data that we have to make informed decisions for the business? And then finally, what we're seeing is in terms of the the market, the markets are shifting, and we've known we've been tracking some of where the work is coming from, impacts of different, federal bills and funding, and how that's impacting other markets, other geopolitical and macroeconomic conditions, and how those are playing into those markets. So all of that is also creating increased competition, and it's really requiring that firms are more diligent and more strategic when it comes to their pursuit strategy. So how they're going about them, how they're working through them, is much more critical, and we'll talk a little bit more about that as we go through the sessions today as well. One of the other questions that we ask firms in every single area of this report is what is the top challenge that your firm is facing in the next, eighteen months to three years? So we ask each, of those different business leaders what's the top overall challenge. You can see here what comes up. And when we ask these, we ask firms to identify what their top three challenges are. And so for business development, for example, what you're seeing here is this means that 44% of companies identified finding time to nurture client relationships as one of the top three challenges that they are facing. Competing priorities is one of the top three challenges for 53% of project managers, availability of good candidates, increasing profitability, prioritizing applicable tech trends. You can see how those are impacting the businesses across the board and, really, what are those top things that, that firms are facing and that they're struggling with the most. A lot of this comes down to time and people. People and restore or resources and time. And so how do we make things so that, you know, we can be more efficient, we can be more effective to really help our teams so that they're not burning out, that we have the resources we need to be able to deliver. Not a new challenge for this industry, but you can see here it continues to be a prevalent theme across all of the different parts of the business. So let's dive into some of the, specific metrics, and let's look at some of the technology trends in particular. We'll start with those. And when we look at some of these, again, all of this data, you will find in the report in different forms and charts. Not all of it will look exactly the way that we have in the presentation today because we're trying to make it easier for you to be able to consume this data, but you will be able to find all of this information throughout the report. So we look at the tech trends. The first thing that we look at is, you know, we're looking at some of the the big things that firms are facing and what they're struggling with. And when it comes to adoption of generative AI, 78% have are saying of firms that in this survey are saying that they are using generative AI in the business. This is a significant increase from last year. So we're excited to be able to see that, but this is actually up 14 percentage points from last year. But we're still seeing that firms are struggling with how is that actually helping my business, what are we actually seeing, And being able to get that return that they're expecting, we will talk a little bit. There there's some more information in the report, and we'll talk about it shortly about where do we see the biggest potential, return and where do we see this really benefiting the company. So we'll dive into that in just a minute. 46% of firms are saying that they've improved operational efficiency. That's one of the primary benefits that they see coming out of using AI. And the importance of this, you know, we're seeing that the firms are really seeing this as a huge priority, not only for streamlining processes, but delivering projects, helping in the pursuit strategy, streamlining how they're managing their financials. And in fact, one in five companies are expecting that they will lose market share in less than two years if they don't make significant digital transformation in their company. So they expect that as other companies become more and more advanced in this, if they don't keep up, it's going to impact the selection of projects. It's going to impact the, their company's ability to win work and hold that market share. On the flip side of that, we're also seeing that firms, 93% of them have experienced a cyber attack attempt in the last three years. That does not say that those have all been successful. The percentage of those that have been successful is thankfully lower than that, but, the impacts of those are pretty significant. So the financial implications, the reputational damage to the business, just continuing to show the importance of this that even though we are, as an industry, getting more sophisticated in how we are managing our cybersecurity, those that are trying to penetrate our businesses are also getting more sophisticated, and it's something that we need to keep an eye on. So as firms are looking to embrace AI, they also need to focus on that secure environment, whether that's in the cloud, so that their data and, is protected, and they're able to prioritize leveraging the technology in the right way so that their business can be the most effective and the most efficient and the most profitable, across the business. So we asked specifically I mentioned before the top technology trend, but I wanted to dig into this one a little bit more. And as you can see here, 61% ranked prioritizing applicable tech trends as their top one of their top three challenges. This is actually down from 76% last year. So the the challenges that firms are facing here have diversified a little bit, and and firms are facing different challenges. 24%, though, of our participants indicated that this is their top challenge, the number one thing that they're facing when it comes to technology trends. That number is also down, six percentage points compared to last year. The next one on the list is lack of time to invest in learning, and 51% of firms ranked that as one of their top three, which is an increase from last year. And so the last one here, the cost of technology. This always seems to rise to the top as one of the top three. Nearly half of firms selected that as one of their top three challenges, but that is a decrease from previous years. So in some cases, technology may be, the the costs are coming down. It's more accessible. Firms are maybe prioritizing it more, and it's becoming a key item in their strategy and in their budget. And this one actually was, was higher last year as well and ranked number two overall. So we looked at that top challenge. Prioritizing tech trends was top. Cost of technology was selected by more people as their as their top challenge overall, from what we saw the the previous year. So just giving a little bit of a glimpse into what firms are struggling with, what they're facing, and and how they're what they're looking to address as we move into the the coming year. I mentioned a little bit of the time before losing market share. So the urgency to digitize before losing market share is becoming more pressing. Firms are really feeling that pressure to do so within the next few years, And you can see here that, the firms that need feel like this needs to be taken care of within the next two years is up nine percentage points compared to the previous year. If you look at, you know, some of the breakdown here, there are some. There's still 15% of companies that say they're not going to lose market share if they don't make any changes from a digital transformation perspective. And then 3% say it's gonna be immediate. If we don't do this now, this is going to immediately impact our business. So when you think about where are they today in terms of their digital transformation, we do also ask firms about their digital transformation maturity. When we look at this, it's a little bit different. We look at the alignment between business strategy and IT initiatives or IT strategy. So those companies that there's a big disconnect, they're, really not seeing the alignment that they need between what the business needs and what IT is focused on. Those are in that nascent category and goes all the way to advanced where digital transformation is really a focus. They've got a culture of innovation. This is embedded in what they're doing, and it's helping them to increase revenue and improve their customer experience and also to help with those operating margins. So as we look at this, what you can see is that firms are continuing to envision a significant move in a positive direction here. So firms are expecting that now, even those that we just look at the advanced, there's 6% that say today, they're very well aligned. They've got that alignment. They've got that culture of innovation. In three years, 38% of our participants expect to be in that category. So you can see how that, you know, even just the mature and advanced, going from just over 30% and the significant number of companies that are expecting to be in one of those two buckets in just three years' time. So how do we get there is really the challenge that you need to be asking your teams. How do we get from where we are today to get better alignment? This isn't about using the software and making sure that we're doing things and that we're not using manual and paper based processes, although that's a super important part of digital transformation. This is really how do we get better alignment in the business between our company strategy and our overall IT initiatives and strategy. So ask your team some questions of where are those gaps today, how do we get there, how do we move that forward. I do wanna just focus quickly on generative AI, and we look at firms that are using GenAI. This is actually up 14 percentage points compared to last year, which is great. More and more firms are starting to get involved and really leverage this, using it mostly for things like meeting notes and administrative tasks, followed by creating proposals, other marketing content. So shout out to all of our marketers and business developers that are really embracing AI to help them with their with their processes, and then also using it for project tasks. So, what we're seeing in that is that firms are still, again, struggling a little bit with being able to measure that outcome, being able to measure the return on leveraging some of these tools. But there is a sense that this really can help their business. So we look at what's the anticipated primary benefits of using GenAI. Firms are expecting improved operational efficiency, being able to improve their internal communications, and ultimately improving project timelines and delivery, being able to use these tools to expedite some of those processes. And now it's just making sure that we're able to to do that in a more meaningful way. So in each of these sections, I've provided a couple of ideas of things that you know, questions that you can ask, things that you can talk about with your teams to be able to take this to the next step. So this, for example, what are your priorities today, and what are the specific steps that you need to move to to make the progress forward, whether it's on digital transformation, whether it's in generative AI, whether it's in helping to prioritize which tech trends. What are the steps specifically that you need to make, and who is going to own those steps? What are your biggest opportunities for automation and to leverage AI? And really asking your teams what's slowing them down the most. What do they not have? What are they, what do they need? Where are there the gaps the biggest? And then how do we solve those challenges? So just some things to take away and think about to really challenge your teams to to move some of those things forward. So let's take a look at some of the financial metrics and the financial performance. For some of you, your favorite topic. For some of you, hang in there. We'll get through financials, and then there'll be some other content for you that are not maybe as financial minded. But we look at overall for financial metrics at a glance. Some of the top challenges, there's a couple of things that I wanna call out here. Increasing profitability moved up to the top spot in terms of challenges firms are facing. Previously, this was, the finding and retaining staff, but increasing profitability has, risen to the top, really showing that firms are struggling with margins, struggling with being able to, be profitable as costs continue to rise for all of us and just being able to make sure that they're hitting those profit targets as needed. So more than half of firms have identified this as one of their top three challenges. Finding and retaining, qualified staff is still near the top there, dropped just under 50% of firms selecting that as one of their top three. And so just the, you know, the financial impacts of that of being able to, turn those projects into, revenue and being able to do that in a timely manner, making sure that you have the right staff, the cost of onboarding, the cost of training, all of those things obviously have a financial impact. And then the last one, increasing leaders' financial knowledge. This is an important one, that we see more and more firms are focused on making sure that their project managers and other leaders are able to understand what all of these metrics mean and where they play into this, how they play a role in it, and how they can help to manage these, these metrics. So I just wanna cover a couple of these quickly, and some of these, we will dive into, a little bit more in the next few slides. The first one is operating profit on net revenue. This is still strong. It's above that threshold for the high performers at 16.7%, but it is down nearly five percentage points year over year. So we have seen a decline in that, and we've also seen, a decline in our utilization rate at nearly four 59%. So that utilization, remember, when we look at that from a clarity perspective, we're looking at in terms of dollars, not hours. So make sure that you're comparing the same numbers that we are. That one declined 2.2 percentage points year over year. Our net labor multiplier also has remained strong, and that is 3.11. It's relatively flat year over year. There's a little bit of change in that one, but not too much, in terms of what we're seeing there. One of the ones that I wanna call attention to is backlog, and, we'll cover this a little bit more in the project management section, but worth noting here from a financials, backlog now is at 6.3. That's what firms the median number that is being reported. And as we look at that, that's down three months from just one year ago. So what's happening in your business that's impacting that? Is it smaller projects? Is it fewer projects? What's happening to decrease that backlog, quite a bit, in in that regard. So looking at these a little bit more in detail, operating profit on net revenue, I mentioned, is at 16.7%. So we're looking at the overall health of the business or the industry. This is one of those metrics that often comes up in conjunction with net labor multiplier, which is one of the reasons that we use that for our high performers in our metrics there. So across the board, as I mentioned, we've seen the decline. We saw a decline across most of the segments if even if just slightly. But a couple of the ones that are worth calling out here, small firms seeing a decline of six percentage points year over year, our large firms seeing a decline of 12 percentage points. And especially for small firms, that six percentage points is a decline after last year declining five percentage points. So just in the last two years, we've seen a pretty significant, decline there. So, just something to to keep in mind in the large firms. Although there's a decline there, they had a pretty significant jump last year. So this one seems to be just kind of balancing out those numbers a little bit. You'll also see throughout the report that we have these trend lines, and I would always recommend that you take these trend lines, and you plot your numbers on those trend lines and see how you measure up over a trend. You know, it may not be that you're right along the line, but if you are looking at these metrics and you're always below or always behind or you're jumping all over, it's just a great visual for you to take your metrics and plot those here, just so that you can see how your numbers are changing. And you can see here the operating profit has its declined, in 2025. That is following several years, as I mentioned before, a very strong financial performance, last year being the highest in the last decade. So net labor multiplier, really not much of a change here. It's a little bit of a decline as performance across the segments was generally stable year over year. So not a lot in here, that, you know, we want to call out specifically, but it's just important to really see where some of those differences are, how firms are measuring up. And then you can also see in the trend line for this one as you get into the report, you'll see how this one has fluctuated over the last decade as well so that you can compare how that measures up to your company. The utilization rate declined across most segments in 2025 with the largest decreases among larger firms. So they went down from 62% last year to 58% this year. Engineering firms also dropped from 62% to 59. And when, again, when we look at this, we are calculating this based on the cost of labor charged, not the hours. So keep that in mind as you are looking to compare your data. You'll also see in the slides as well as in the report, any of these that are calculated from our side based on the the information that we get. You will see the written out, what the calculation is so that you are looking at these calculations in the same way. So you can see that at the bottom of the screen here. That's also in the report so that you can look at those calculations as well. So this one, I did put in the trend line so that you can see that utilization dipped this year after increasing for the last several years, with elevated numbers in the last few years. We usually see this hover right around 60% if you look at the pre pandemic where it was just kind of going back and forth around that 60%. A little bit more fluctuation in the last five years in terms of what we have seen here. So as you are evaluating your utilization, what are you seeing across the business? Are there areas that are better than others? Maybe there's some areas that we need to focus on cross training, better utilization. Are some of your team members overextended? So it's really taking this information and diving in to identify where there are challenges that your teams are facing, what are the things that, that you need to dive into, and and what you need to do here. So one of the things that I forgot to mention, I saw one of the questions in the chat. As we go through all of this data, unless otherwise noted, all of these are median numbers. So the the the primary number that you see, for example, the utilization number in blue there, the 58.9%, those are all median numbers, and all of the segments are medians within those segments. There are some of the data, some of the the numbers throughout that are averages instead of median. That is something that you will see noted where it's applicable in those particular sections. But everything else, as you can see noted here, are in median. So a couple of things again for financials. As you're looking at Project Martingens tightening, where's the room for efficiency gains? Where can you leverage automation? Where are there opportunities for your teams? Do you have visibility that you need so that you can adjust mid project? You can adjust mid quarter. You can adjust midyear. You can do any of those things. What's holding you back from the financial performance perspective? What are the biggest risks that you're facing? What are the biggest challenges that your teams are facing? And where are their opportunities for growth? How do you make those opportunities for growth a reality? And we'll talk about some of those growth opportunities a little bit later in the session today. So let's talk about projects. We're all focused on delivering projects, managing projects, making sure that our clients are happy with the projects that we're working on. So how well are we doing in those projects? We look at the project management challenges. In the next three years, firms expect that competing priorities are going to be the top challenge for them. And you can see that 53% of firms said that competing priorities, having project managers that are managing projects, doing design, they're also responsible for business development. They're wearing so many hats. 53% said that is the top challenge, one of the top three challenges that they are facing. 27% said it is absolutely the top challenge that they are facing this year, in the next three years. Staff shortages and incorporating AI into project management are also in their tied at 32%. Incorporating AI into project management is a new option this year. So right out of the gate, we've seen more of nearly a third of companies that are saying, this is one of the biggest challenges that they're facing, whether that's from a client perspective or from an internal perspective. How do they successfully incorporate AI into how they are managing their projects. So as we look at, a couple of other things in here, fewer firms selected competing priorities as we look at this compared to last year, because of some of those new options in the mix like incorporating AI into project management. But more firms have selected as the overall top challenge as we look at that compared to, the the previous one. So when you look at some of these, there it also shows that there's a variety of challenges that firms are facing. So not just those top three, but firms are facing struggles with inexperienced project managers, not being able to accurately, forecast their costs and their timelines, their schedules. Accountability is a big one. So you think back to the financial challenge of being able to, educate project managers on the financials and the financial management and the the accounting metrics. Accountability comes into that too. What are our project managers being held responsible for? What is it that they the tools that they need to be able to help them to be accountable? So think about some of those opportunities for your team and how do you how do you help to improve that over the next several years. I mentioned before the backlog in months, and I wanna dive into that one a little bit more. When it comes to delivering and managing projects, we also have to manage the overall backlog do firms have contracted that hasn't been delivered yet? So there's a few things that I want to note here. Overall, like I mentioned before, backlog declined across most segments, and you can see the most notable declines here. Our our all other firms declined, and our engineering firms declined. Small and medium also, above two point five months have a decline compared to compared to last year. So firms may be working through projects faster. They may be shorter duration as I mentioned before. There's a lot of things that could be impacting this, but it's really important that you are having these conversations and making sure that you understand why this is changing. The other thing that I would say is noteworthy on this is look at the quartiles that are underneath the six point three three months. The top quarter, there are firms that are looking at, you know, nearly eleven months and more in their backlog, and there are firms that have less than half of a month of backlog. So the bottom quarter of our teams or our firms that responded based on the information that they provided, have less than half a month of backlog. And so what does that mean for your business? How does that impact your business development teams? What do you need to focus on to help with that backlog and to help manage that effectively? We also ask firms about the performance of their projects. So the first one is projects that are on or under budget. 75% of firms are say or 75% of current projects are on track from a budget perspective according to our participants. High performers were up slightly, six percentage points compared to last year. Our architectural firms actually declined almost eight percentage points, and large firms also declined this year. So, overall, it's relatively steady, but there are some different places where, the this has fluctuated in different segments. When you think about your teams and their projects, what do they have access to to help with this? Can your project manager see how their projects are actually performing before they get their billing reports, before we try to get to month end close and billing and all of those things so that they can make adjustments. They can adjust staff. They can adjust hours. They can adjust whatever they need to to help keep those projects on track. And when you think about that challenge of accountability, some project managers can't be held accountable if they don't know what the budget is. They don't know how the project is progressing. They don't they don't have what they need to be able to make a change. So as you're thinking about accountability for your project managers, do they have all the tools and resources that they need to be able to manage this proactively and be able to stay on top of this? And while budgets have remained relatively unchanged, schedules also have remained relatively unchanged, but I would say this number is still concerning to me for the last several years. So, what this means is that 40% of our projects are behind schedule when the point of reporting this. So high performers and medium firms had, improvement slightly in their schedules. Large firms, again, saw a decline about five percentage points in terms of the projects that they have on schedule. Also look at the quartiles here. The bottom quartile is saying that less than a third of their projects are on schedule. Top quarter is saying that, you know, more than 85% of theirs are on track, which is great. But what's happening in those projects? Are those client driven delays? Are there things that are happening in the market that are having significant impacts on your projects, or are they internal staffing challenges? Are there things that are happening internally that you can control? What else is happening, within your business that's impacting your ability to deliver these projects on schedule. We ask firms about level of visibility too, and this is an important one because if firms' leaders can't see what's happening, they can't control what they can't see. So visibility into, metrics around the projects remained largely the same. So we look at, do our project managers and our, leaders have access to cost variance information, project specific KPIs, schedule variance, and client satisfaction. And you can see the percentage of participants that have said they have very high visibility into those. They only have high, maybe very low. As we look at the schedule challenges of 40% of those schedules not being on track, there has to be a correlation here to the fact that we have so many companies that have said that their level of visibility for schedule variance is either low or very low. So if that's your company, that's a good opportunity to have some conversations with your project managers and be able to talk to them about what is it that they would like to see, how can they help with this. It's almost like as we as we look at some of these, and you think about where your firm fits in this in terms of visibility, it's it's almost like putting a little bit of a you know, ask all of your project managers where would you see that we fit into this. A little bit of, like, take your sticker or pin the tail of the donkey and put it in each of these lines and see where they all fall. Do they all come into the same and say, yes. We're good, Or do you have some people that are in that low to very low that you can help and and make sure that they have the information they need to actually be effective in their jobs and in the roles that you're asking them to do? So are you all aligned? Are you where you need to be from a business perspective? If not, what can you do right now to help improve that and to improve the accuracy of this information? It's not all doom and gloom for our projects, though, as our project teams are doing some things really well. So I wanted to highlight some of the good as well. And firms are reporting that they are managing client relationships really well. They're collaborating and communicating both internally and externally, externally, and that they're also doing well defining the scope for their projects. So if you look at those, again, the firms that have selected those as one of the top three things that they do really well in project management. So good to see that, you know, managing client relationships right up their top. It's so critically important. But I also think it's important to look at some of the things that again, that thread of schedule, schedule visibility, and schedule maturity is at the bottom of the list and things that we do really well. So not surprising that our level of visibility, what we do well, that's resulting in our projects not being where we need them to be. So just some things to to challenge and be able to ask questions about, from our from the business perspective. So this is really from a project management perspective, but what are some of the things that are causing issues in your schedules today? What's what are the things that would help your project managers the most? What tools or what security rights in many cases would give them greater visibility, help them to better manage their resources, help to monitor their project performance, and really where are their opportunities to help them, whether it's through automation, through AI, whatever those tools are that are going to make the most sense for your business and for your clients, and really talk to them and ask those questions. Because a lot of them have great ideas and a lot of your design staff do as well. It's just giving them the opportunity to share some of that information. I wanna spend a few minutes looking at the, human capital management side because we know that delivering great projects, excuse me, and managing successful business relies on great people. If we don't have great people that can deliver the work, we're not able to deliver the work. So let's take a look at some of the people metrics quickly here. So when we look at these, the top challenges in terms of managing people, the things that have come out on top this year are succession and career development planning, workforce and capacity planning, and performance management. So how do we make sure that not only do we have the right people, but we're able to nurture them and help them to stay engaged and to help them to see the right future path for their for them within this organization? And then how do we just continue to plan for capacity and make sure we have the right people for the right projects at the right time? Couple of the other things that are worth noting here that have direct impact on all of the projects that you are delivering is employee turnover. So this number, although slightly increased compared to last year, is the highest that it has been in five years. So 13.8% also higher than what we see in many other, industries, which also is impacting the staff growth. So we've seen very moderate staff growth this year, with 1.2% year over year. The bottom quarter actually saw a 5% decline compared to the previous year. So, we also ask firms about this was a new question about what are the most skills what are the most needed skills as you're looking for new hires? And it's interesting here that some of the things that have come out are not traditional things that we looked at ten years ago or even five years ago of skills that we'd be looking for as we're hiring. But strong project management skills, not surprising there. AI literacy, ability for collaboration, adaptability, a lot more of those soft skills and agility that we're looking for in our design teams so that we're able to adjust and and meet the client needs, but also the ever changing business landscape that we're dealing with in this industry. The other metric that I pulled out, for this is that twenty one percent of participants experienced a reduction in force or reduced number of positions or staff that, that, you know, the business had determined to reduce those number of positions. And diving into that one a little bit more, we asked what are the events that have been experienced, by your company in the last year. Overall, more firms have experienced at least one of these. The rifts or the reduction in force continued as a leading event this year. There's actually more firms that experienced a reduction in force this year than what we saw last year. And then we also saw some of the other challenges you can see here. Acquisitions and mergers, not surprising, was much higher for large firms as there's been a tremendous amount of merger and acquisition activity in this industry. But interestingly, you know, the 16% of firms that say they're they're struggling to adhere to new laws and regulations as a business. And so how is that impacting your business? Also seeing tied to that turnover rate and the slow staff growth, the significant increase in voluntary turnover reported by 14% of our participants. So looking at the employee turnover, and then we'll look at staff growth here quickly as well. Just wanna show you a little bit of information in terms of how that breaks out across the different segments, and being able to see where some firms have higher turnover rate compared to, the previous year. We did see that the high the increase was driven primarily by small and medium sized firms. They actually saw the biggest increase this year in this number. From a staff growth perspective, you can see here that this declined, and you can see again the variation between the top and bottom. So top quartile seeing nearly 8% year over year growth, bottom quartile seeing a contraction of nearly 5%, or more for some firms that are in the bottom quarter. And then this really driven by the medium sized firms as well as the architectural firms seeing, the biggest declines in this area. So I wanna touch on a couple things quickly as we're running out of time for business development, and just give you a little bit of insight into what we're seeing as we're looking forward, and we want to be able to win new work and pursue new projects. So looking at this at a glance, net revenue growth forecast was relatively stable, a little bit lower than last year, still at around 9.5. And some segments, I'll show you in a minute, have a little bit more ambitious, some are not so ambitious this year. Proposal win rates declined slightly. Those are for competitive proposals at 49%, capture rate being a little bit lower at 44. So proposal win rate is the number of proposals that we are pursuing. Capture rate is the dollar value of those proposals that we pursued compared to the number that we, were able to win. In that regard, in terms of win rates and capture rates, it's also worth noting that there was a 32% increase in the number of proposals submitted. So the impact that that's having on your proposal teams, your business developers, your project managers, is something that you definitely need to think about and plan for if that is continuing to be a trend for your business. And then when we look at where the revenue is coming from in terms of why the business developers, where they need to focus, where their priorities need to be in terms of net new, existing, all of that combination, 30% of revenue was coming from the top three clients this year. So 30 per almost a third of a company's revenue is coming from just three clients, which is important, as we're thinking about our business development strategies. In terms of the top challenges, you can see some of the details here where finding time to nurture client relationships, 44% of firms ranked that in their top 16% actually indicated that that is their top challenge. Increased competition, again, as markets are fluctuating, projects are fluctuating. 40% said that that's one of their top challenges, which is a decline compared to the previous year. And then economic uncertainty, you can see 38% of firms, selected that as one of their top three, and this is a new option this year. So more than a third of firms said that that is definitely a challenge that they're facing. Nearly 20% said that this is their top concern as they think about the next few years, just not understanding the dynamics and how that has a direct impact on what we do from a business development and marketing perspective. So that net revenue growth forecast as business developers, you know, what are we expecting to, what are we expecting to happen as a business? What are we expecting to grow, and where do we need that work to come from? So you can see a little bit of the fluctuation here. Large firms are, expecting a little bit more growth. Medium firms and architectural firms are a little bit more conservative in terms of what they are expecting over the next year. But, again, those quartiles, nearly 20% growth by some companies that they're expecting year over year, and bottom quartile expecting a retraction or contraction in terms of their growth forecast. So as you're looking at where your firm fits into this, there's a lot of variability here, that that we need to look at. Here's the ten year trend as we're seeing a little bit of this in my mind leveling off a little bit more from that 2022 peak of 17%. And one of the things that I would challenge you is as you're looking at what your your expectations are for revenue growth, go back to the last few years. Were you able to if you said that your growth expectations were 10.9, that was your forecast. Did you get close? Did you hit that number? Were you able to, forecast appropriately? So it would be good to be able to plot out your forecast versus your actual for each of these so that you can see if maybe there's some other things that you need to do in terms of, how you're forecasting, the accuracy of your forecasting so that you can work better as a team to figure out where those opportunities are. So then we also ask about market positions. Where do you expect there to be growth? Where do you expect your firm's position in the market to remain steady or decline in the next eighteen months? Data centers was new in 2025. Not surprising that that is leading our growth projections followed by some of our normal top of the list energy and power, water, wastewater, stormwater, public, and municipal. Some of the ones that are also worth noting are where we where firms are expecting the biggest decline. We're seeing that in federal as well as residential and then religious facilities, hospitality. You can see some of the other ones on the list here. So in terms of where are where is that growth gonna come from? Where are we gonna get that 9.5%? That's really what we're asking firms for in this is where do you expect that market position to grow or remain steady. And where are the other growth opportunities? Not all of those are just in projects and opportunities or projects in in in pursuits. There's also other opportunities for businesses. So investing in project managers, firms identified that as one of the biggest opportunities for growth for them this year, growing their brand, optimizing their resource allocation, automating some of those processes, and then you can see some of the other ones here as well. So lots of different opportunities for how firms expect to be able to grow. If they're looking to grow revenue, that's not always more projects. Sometimes that's, it's some streamlining and automation to be able to, save some of that. So we're seeing some of that in terms of, of of what firms are expecting this year. So when we ask firms, what are you planning to do about those challenges and some of the data that you've seen? These are the top initiatives in the different, areas of the business. So strategic networking to expand teaming opportunities for business developers. As we're seeing those market shifts, they're trying to find the right teaming to be able to go after those projects. Project managers are trying to implement not only accountability, but the right metrics and the right measures to make sure that we're keeping our projects and our PMs on track. HCM, they're really looking at new grads or younger professionals. So my challenge is to make sure that then you have the right programs in place to be able to onboard those teams, that they have staff internally that they can team up with, that they can work with, that they can learn, and they can grow. So make sure that you have those processes in place and the time to be able to make that successful for your new grads. And then financial management, business process improvement is a key area for them as we're looking to improve overall and just, again, streamline, automate where we can, and get rid of some of these manual, legacy systems and processes and things that are that are slowing us down. So with all of that data, there's so much more that we will have, for you. The next steps for you, download the full report. You have not done that already, make sure that you do that. Share it with your teams. Take a look at your scorecard. If you participated in the, survey, you will get your customized scorecard with all of your results. If not, you can still get a scorecard and you can fill in your own results, and we can get that to you. Use those charts to chart out your KPIs, as I mentioned on some of those trend lines, so that you can monitor where some of your, metrics are, where those variances are, and really start to develop a plan to move those metrics in the right way. And then, also, I recommend signing up for our deep dive webinars that we're gonna have throughout the summer. You can see what those different dates are here. You can sign up to join us. I will be doing some of those. Brett Tasshaus will be leading one, and Linda Dininger will be leading several of these as well. We will dive more in-depth on each of these areas than what we were able to do. So you will be able to, just learn more and more. You don't have to participate to be a part of these. You can download the report if you did not participate in the survey, but having your data in that survey is critically important to us, and we just really appreciate, you being able to do that with us. So there's plenty of ways that Deltek can help beside just providing this great resource and data for you. We are focused on leveraging the tools and technology that you already have or maybe ones that, we can put into place to help you so that you can better monitor where those opportunities are. You can proactively manage your pipeline. We can help you deliver projects with more agility and flexibility than what you have in the past. Help you to streamline your cash flow, automate your manual processes, make sure you're monitoring your business with your Clarity KPIs, doing that right within your Deltek solution so that you can see how you're performing and how that compares to what we're seeing in the Clarity results. So I encourage you to reach out to your teams, your Deltek team, or if you have questions, you can always reach out to me. We'd love to be able to help you to find better ways to run your business, better ways to leverage, your this information to really be a catalyst for your business to move forward. I know there's a lot of questions in the chat, and I did not have enough time to get through all of them, but I will respond to your questions. So, I will send you those. If you've already submitted them, I have them, and I will respond. If you didn't have a chance to submit a question or you think of something later, you can email me directly. My email address is here. I'm happy to answer those questions for you or to at least point you in the right direction of who at Deltek can help to, to answer those questions for you. So, so one of the things that I'm just gonna answer a couple of the questions that have come in in hopes that, I can answer a little bit for you guys as we have the last couple of minutes here. One of them is in terms of win and capture rates. Are those based on all pursuits or just RFP driven? And so what we ask as a part of the survey is that those be competitive proposals. So they may not always be RFP, but there should be at least one other company that is going after that. So if you have a letter of interest or you're just submitting a price proposal and you're the only one that's submitting it to that client, that would not be something that we would want to be calculated as a part of that. So, also, another question. I've gotten a couple questions in terms of backlog and how that's defined. You can see that in the report in terms of how we calculate that. If you have more specific questions on how we calculate that, plea feel free to email me, reach out to me, and I'm happy to, help answer some of those questions. So, the backlog does include all of that labor. So if you look at that calculation in terms of what's included, it will show you, you know, how we calculate that. But if there's more questions on that, happy to answer that. And then one other question that I wanna make sure that I answer as we're wrapping up is there's a question about how do we make sure that there's not duplicate responses from one company. So as we go through this, we do ask participants to provide their, company email so that we can link different responses. If somebody responds to business development, somebody else responds to the financial management, we then aggregate that data based on the, company name and the email domain. So those are things that, we are keeping track of. And then if we get multiple responses from the same company on the same section, then our teams will work through to make sure that we have the best information, and we can reach out to them and and make sure that that we know which data we should be using. Because, ultimately, that plays into the scorecard calculations, and we want to make sure that we have the best representation for your company. So with that, I wanna thank everybody for joining. I really appreciate you all being here, taking the time to be a part of this. I hope that you will walk away with some very tangible ways that you can take this data and use it to help improve your business, and I hope that you will join us for our webinar series throughout this summer. Thank you so much, and have a fantastic day.